Paradiso, Antonio and Kumar, Saten and Rao, B. Bhaskara (2011): The growth effects of education in Australia.
Download (545kB) | Preview
The growth effects of human capital, measured in various ways, are controversial and inconclusive. In this paper we estimate the growth effect of human capital with country specific time series data for Australia. In doing so, we extended the Solow (1956) growth model by using educational attainment as a measure of human capital developed by Barro and Lee (2010). The extended Solow (1956) model performs well after allowing for the presence of structural changes. Our results, based on alternative time series methods, show that educational attainment has a small and significant permanent effect on the growth rate of per worker output in Australia. For comparison of results, alternative measures of human capital are also utilized.
|Item Type:||MPRA Paper|
|Original Title:||The growth effects of education in Australia|
|English Title:||The Growth Effects of Education in Australia|
|Keywords:||SSGR; Economic Growth; Education; Australia|
|Subjects:||O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O56 - Oceania
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
|Depositing User:||Saten Kumar|
|Date Deposited:||17. Nov 2011 14:21|
|Last Modified:||12. Feb 2013 00:48|
Andrews, D. W. K. (1993) Tests for parameter instability and structural change with unknown change point, Econometrica, 61, 821-856.
Andrews, D. W. K. and Ploberger, W. (1994) Optimal tests when a nuisance parameter is present only under the alternative, Econometrica, 62, 1383-1414.
Arai, Y. And Kurozumi, E. (2007) Testing for the null hypothesis of cointegration with a structural break, Econometric Reviews, 26, 705-739.
Arrow, K.J. (1962) The economic implications of learning by doing, The Review of Economic Studies, 29, 155- 173
Asteriou, D. and Agiomirgianakis, G. M. (2001) Human capital and economic growth: time series evidence from Greece, Journal of Policy Modeling, 23, 481-489.
Barro, R. J. (1991) Economic growth in a cross-section of countries, Quarterly Journal of Economics, 106, 407-443.
Barro, R. J. (1997) Determinants of economic growth: a cross-country empirical study, MIT Press, Cambridge.
Barro, R. J. and Lee, J.W. (1993) International comparisons of educational attainment, Journal of Monetary Economics, 32, 363-394.
Barro, R. J. and Lee, J.W. (1996) International measures of schooling years and schooling quality, American Economic Review, 86, 218-223.
Barro, R. J. and Lee, J. (2010) A new data set of education attainment in the world, 1950-2010, NBER Working Paper No. 15902. Available at http://www.barrolee.com/data/dataexp.htm (Accessed 29 April 2011).
Barro, R. J. and Sala-I-Martin, X. (1995) Economic growth, McGraw Hill, New York.
Benhabib, J. and Spiegel, M. (1994) The role of human capital in economic development: evidence from aggregate cross-country data, Journal of Monetary Economics, 34, 143-174.
Besley, T. and Reynal-Querol, M. (2011) Do democracies select more educated leaders? American Political Science Review, 105, 552-566.
Bergheim, S. (2008) Long-run Growth Forecasting, Springer, Berlin.
Caselli, F., Esquivel, G. and Lefort, F. (1996) Reopening the convergence debate: A new look at cross-country growth empirics, Journal of Economic Growth, 1, 363-390.
Chow, G. C. (1960) Tests of equality between sets of coefficients in two linear regressions, Econometrica, 28, 591-605.
Descy, P. and Tessaring, M. (2004) Evaluation and impact of education and training: the value of learning, Office for Official Publications of the European Communities, Luxembourg.
De La Fuente, A. and Doménech, R. (2000) Human capital in growth regressions: how much difference does data quality make? OECD Working Paper No. 35, Paris.
Engel, R. F. and Granger, C. W. J. (1987) Cointegration and error correction representation, estimation and testing, Econometrica, 55, 251-276
Englander, A. S. and Gurney, A. (1994) Medium-term determinants of OECD productivity, OECD Economic Studies, 22, 49-109.
Ferreira, P. C., Pessoa, S. D. A. and Veloso, S. A. (2005) On the tyranny of numbers: East Asian miracles in world perspective, IBMEC Business School Economics Discussion Paper No. 10, Rio de Janeiro.
Gemmell, N. (1996) Evaluating the impacts of human capital stocks and accumulation on economic growth: some new evidence, Oxford Bulletin of Economics and Statistics, 58, 9-28.
Graff, M. (1995) Education and technical progress as determinants of economic development: a theoretical and empirical investigation, Physica-Verlag, Heidelberg.
Graff, M. (1996) The significance of education within the process of economic development, Kölner Zeitschrift für Soziologie und Sozialpsychologie, 48, 274-295.
Gregory, A.W. and Hansen, B.E. (1996a) Residual-based tests for cointegration in models with regime shifts, Journal of Econometrics, 70, 99-126.
Gregory, A.W. and Hansen, B.E. (1996b) Tests for cointegration in models with regime and trend shifts, Oxford Bulletin of Economics and Statistics, 58, 555-559.
Greiner A., Semmler, W. and Gong, G. (2005) The forces of economic growth – A time series perspective, Princeton University Press, Princeton.
Hansen, B. E. (1997) Approximate asymptotic p values for structural-change tests, Journal of Business and Economic Statistics, 15, 60-67.
Hauk, W. R. and Wacziarg, R. (2004) A monte carlo study of growth regressions, NBER Technical Working Paper No. 296.
Jenkins, H. (1995) Education and production in the United Kingdom. Nuffield College Economics Discussion Paper No. 101, Oxford.
Judson, R. (1998) Economic growth and investment in education: how allocation matters, Journal of Economic Growth, 3, 337-360.
Kumar, S. and Webber, D. (2013) Australasian money demand stability: application of structural break tests, Applied Economics, 45, 1011-1025.
Lee, J. and Strazicich, M.C. (2003) Minimum lagrange multiplier unit root test with two structural breaks, Review of Economics and Statistics, 85, 1082-89.
Lee, J. and Strazicich, M.C. (2004) Minimum LM unit root test with one structural break, Appalachian State University Department of Economics Manuscript.
Loening, J., Rao, B.B. and Singh, R. (2010) Effects of education on economic growth: evidence from Guatemala, University Library of Munich MPRA Paper No. 23665.
Levine, R. and Renelt, D. (1992) A sensitivity analysis of cross-country growth regressions, The American Economic Review, 82, 942-963.
Loayza, N. V. (1994) A test of the international convergence hypothesis using panel data, World Bank Policy Research Working Paper No. 1333.
Lucas, R. E. Jr., (1988) On the mechanics of economic development, Journal of Monetary Economics, 22, pp.3-42.
Maddison, A. (1995) Monitoring the World Economy, 1820-1992, Development Centre Studies, Development Centre of the Organisation for Economic Co-operation and Development, Paris.
Mankiw N G., Romer, D. and Weil, D. (1992) A contribution to the empirics of economic growth, Quarterly Journal of Economics, 2, 407-437.
McKenna, R. and Fitzpatrick, L. (2004) Building sustainable adult literacy provision: A review of international trends in adult literacy policy and programmes, National Centre for Vocational Education Research, Adelaide.
Paradiso, A. and Rao, B. B. (2011) How to offset the negative trend growth rate in the Italian economy? Applied Economics Letters, 18, 1479-1483.
Park, J. (1992) Canonical canonical regressions, Econometrica, 60, 119-143.
Park, J. (2010) Projections of long-term total factor productivity growth for 12 Asian economies, Asian Development Bank Working Paper No. 227.
Parente, S.J. (2001) The failure of endogenous growth, Knowledge, Technology and Policy, 13, 49-58.
Phillips, P., and Hansen, B. (1990) Statistical inferences in instrumental variables regression with I(1) processes, Review of Economic Studies, 57, 99-125.
Quandt, R. E. (1960) Tests of the hypothesis that a linear regression system obeys two separate regimes, Journal of the American Statistical Association, 55, 324-330.
Rao, B.B. (2010a) Estimates of the steady state growth rates for selected Asian countries with an extended Solow model, Economic Modelling, 27, 46-53.
Rao, B. B. (2010b) Time-series econometrics of growth-models: A guide for applied economists, Applied Economics, 42, 73-86.
Rao, B. B., Singh, R. and Kumar, S. (2010) Do we need time series econometrics? Applied Economics Letters, 17, 695-697.
Rao B.B. and Vadlamannati, K. (2010) Estimates of the level and growth effects of human capital in India, Applied Economics Letters, 18, 59-62.
Romer, P. M. (1986) Increasing returns and long run growth, Journal of Political Economy, 94, 1002-1037.
Solow, R. M. (1956) A contribution to the theory of economic growth, Quarterly Journal of Economics, 70, 65-94.
Stock, J. H. and Watson, M.W. (1993) A simple estimator of cointegrating vectors in higher order integrated systems, Econometrica, 61, 783-820.